Why some Forex robots are pure gambling

pure gambling forex robot

The robots are indeed taking over the Forex market and even the largest investment banks are turning to them and firing their traders. Knowing this can be very tempting because you can just imagine yourself going about your business while a robot makes you money at home.

This isn’t always the case, though, and a lot of people have lost their investment because of using these robots. I am not advocating that we do away with robots, not at all, just that everyone should be more careful when choosing a trading robot. Some of them are just like gambling, and you would rather lose your money enjoying the view in a casino that let a robot squander your savings.

How do Forex robots compare to gambling?

First of all, you should be aware that Forex robots are just programs that operate on an algorithm created by someone. The person creating the algorithm will program the robot to make trades based on a certain trading strategy which they think is successful. The problem is that some of these programmers use actual casino gambling strategies in their Forex trading, and program the robots to follow these strategies.

The Martingale strategy, for example, implies that if you keep doubling up your bets, you will eventually win. You may have seen the strategy in action on the movie Focus where Will Smith acts as the gambler. What most people don’t know about this strategy is that it has a huge caveat, it requires unlimited resources. Therefore, how many losing trades do you think you can survive before your entire capital is wiped out?

This isn’t the only gambling strategy programmed into these trading robots, and it leaves you gambling with your money in the hopes of a big payday.

Another factor that makes some Forex robots the same as gambling is the lack of understanding of the system. Say, you bought one of these robots from the internet; it would probably be advertised as having a good return and minimal drawdown, but these are not all you need to know. Do you know under which timeframes, currency pairs and lot sizes it works? Probably not.

Some of the Forex robot sellers will not announce this information for fear of their robots appearing limited, yet this is exactly what they should be. A good Forex robot should be programmed to analyse the market conditions of a particular currency pair deeply and make very accurate predictions.

Don’t forget you won’t also know just how reliable the trading robot is until you actually run it. if that isn’t the very definition of a gamble, then I don’t know what is. It is impossible to know how well the robot works, how far back it backtests the markets and what criteria it uses to generate orders, and that all makes a lot of the Forex robots just the same as a gamble.

Just to reiterate, not all Forex robots are a gamble, there are indeed some reliable ones out there that can make you some good profit. To get such, you need to avoid any of the factors that make a Forex robot the same as a gamble – ask for a lot of information and request for its previous performance before you risk your money.

Leave a Reply

Your email address will not be published. Required fields are marked *